GBP

I refuse to believe that the pound is has a bullish outlook relative to the dollar.  They have introduced forward guidance, maintained an asset purchase program, maintained an inflation target of 2%, and maintained low interest rates... all very similar to the fed.  They have set very specific level of 7% unemployment as a threshold for a positive change in the interest rates, and while they won't break this threshold anytime soon, it puts additional focus on the jobs number.  The linchpin to the GBP strength and British economy is the assumption that the policies enacted will lower the unemployment rate.  This unfortunately is not a valid assumption.  Here's the unemployment chart straight from the BoE:

Interest rates were last lowered in 2009 while the employment rate was still blasting higher.  Since that time BoE has been in a rather consistent asset purchasing program that has gone up throughout the years from approximately 125 billion in 2009 to 375 billion today in 2013.  GDP is not growing at a particularly effective rate, and without QE it would be quite negative.  Inflation is already running a bit over target at up to 2.5%... which brings me to the question of the day:  How would the BoE respond to both high inflation and high unemployment?  They are currently running both over the inflation target and over the unemployment target.....Do they have a "tool" in their toolbox for that?  The realistic answer is obviously no, and the worst of two evils will be dealt with.  From the government perspective, from the voter majority perspective, and from the government-appointed BoE chair, the worst evil is certainly going to be the unemployment rate.  The economic rules, theories, and strategies to combat such a program fall in line with raising the scale of what they are currently doing.  The decision process to QE is even self correcting.... if the BoE ever decides to "taper" it will have an absolutely direct effect on government borrowing and thus have a direct effect on government supplied jobs.  This has a very instantaneous effect on the job numbers.... which will drive BoE to opt for further QE despite inflation because of the severity of unemployment.  BoE is going to hit this cliff before the Fed.  The dollar as a safe haven stands to benefit from the economic disparity in England, the GBP stands to devalue as it embarques on more QE or as general economic conditions of the world grow worse and people flee to the dollar.